Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) Just Reported Second-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) last week reported its latest quarterly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Vertex Pharmaceuticals reported revenues of US$2.6b, in line with expectations, but it unfortunately also reported (statutory) losses of US$13.92 per share, which were slightly larger than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Vertex Pharmaceuticals

earnings-and-revenue-growth

Taking into account the latest results, the current consensus from Vertex Pharmaceuticals' 30 analysts is for revenues of US$10.8b in 2024. This would reflect a modest 4.2% increase on its revenue over the past 12 months. Losses are forecast to balloon 22% to US$2.33 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$10.8b and losses of US$0.32 per share in 2024. While this year's revenue estimates held steady, there was also a regrettable increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

As a result, there was no major change to the consensus price target of US$497, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Vertex Pharmaceuticals, with the most bullish analyst valuing it at US$600 and the most bearish at US$325 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Vertex Pharmaceuticals' past performance and to peers in the same industry. We would highlight that Vertex Pharmaceuticals' revenue growth is expected to slow, with the forecast 8.6% annualised growth rate until the end of 2024 being well below the historical 19% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 18% per year. Factoring in the forecast slowdown in growth, it seems obvious that Vertex Pharmaceuticals is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Vertex Pharmaceuticals' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$497, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Vertex Pharmaceuticals going out to 2026, and you can see them free on our platform here..

You can also see our analysis of Vertex Pharmaceuticals' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com